BUI - Utilities Are Still One Of The Best Options For Defense

Summary

• The Utilities sector was a stand-out in 2022 because it wasn't down by double-digits. In fact, it managed a small gain while most sectors declined (except for Energy).
• With investors facing a lot of uncertainty in 2023, this remains a great way to play defense if one is concerned about economic growth.
• Higher interest rates tend to correlate inversely with utility share prices. This pattern broke down last year and worries me less going forward as a result. This is especially true if the Fed's rate has peaked.
• I use VPU and BUI to play this space, but many passive options exist.

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